Last Week in ConTech - 14 October 2024
Over $250m in new funding announcements + Data center spending continues to rise
Last Week in ConTech is a summary of the most important construction startup funding, news, policy changes and national project investments in the last 7 days. The goal is to provide decision makers with information on technology solutions and macro-economic trends in construction to help drive innovation in the industry.
In this issue there are:
16 Startup Fundings
9 Policy and Regulatory Changes
0 US election policy updates
7 New National Infrastructure Projects & Priorities
1 New investment fund
0 Acquisition
5 News articles
49 new jobs posted - view here
Reading time: 14 mins
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Startup Funding
Estimating
Drawer AI, an Austin startup, raised $5m in Seed funding led by Brick & Mortar Ventures. They develop AI powered software which allows electrical estimators to upload their PDF drawings and quantifies elements such as light fixtures or power devices needed. More here.
[View open jobs - 5 roles in Software, 1 role in Customer Success, 1 role in Sales]
Notes:
Drawings are inherently complex for AI to interpret due to a lack of standardization and the need to understand relationships between sheets, layers, and drawing conventions.
Additionally, there is less training data available for drawings compared to text-based generative AI tools, which can be trained on the vast amount of text from the web.
To address this, Drawer AI has focused specifically on solving a key pain point for electrical estimators where they have industry background / expertise.
As they gain more customers and collect more drawing data, they may be able to offer a broader solution, potentially in the long term creating an AI system that contextually understands all parts of construction drawings—like a 'ChatGPT for construction drawings.'
This could be immensely valuable, as many startups might prefer to plug into this solution rather than building their own AI tool for understanding drawings, similar to how companies use ChatGPT to power chatbots on their platforms.
Contracts
Document Crunch, an Atlanta startup, raised $21.5m in Series B funding from investors including Navitas Capital and Zacua Ventures. They provide an AI driven contract intelligence platform for the construction industry simplifying construction documents, identifying risks and empowering users in understanding what’s in their construction contracts. More here.
[View open jobs - 1 role in HR, 3 roles in Software, 3 roles in Marketing, 2 roles in Sales]
Notes:
Document Crunch offers an onboarding and implementation process unique to the needs of each customer who signs up.
They also provide dedicated account management support to ensure their platform is successfully operationalized into an organization including quarterly business/performance reviews for alignment.
My notes:
In construction it is common for a startup to win a pilot project for a company but then not have the solution adopted throughout the organization.
As Nate Fuller puts it, you need to ‘cross the chasm twice’ in construction. He explains:
“As a technology provider, you will need to cross the chasm internally on multiple projects within one construction company before getting the referrals that allow you to cross the chasm externally to a wider market.”
Many startups fall into the 'death by pilot' trap—they enter a company but fail to scale within it.
To overcome this, construction startups often empower their customer support teams, which are typically staffed by industry professionals who have transitioned to tech, to lead onboarding and implementation.
Lately, I’ve noticed startups are focusing more on selling to mid-market firms because the sales cycles are shorter compared to large enterprise clients (1 month vs 6 months).
The challenge is that customer support teams, which were handling 2 enterprise clients, now have to support 10 mid-market firms.
This overload requires the sales team to brief the support team on 10 customers’ unique goals and needs, which increases the risk of falling into a 'death by pilot' scenario.
Additionally, in our industry, communication is key—if you send an email, you'll often get a call back. AEC firms expect dedicated support.
For startups, it’s crucial to decide where to invest: growing revenue through new customers (invest in sales) or deepening relationships with existing ones (invest in customer support).
Either way, implementing a clear process, like Document Crunch's approach, can be valuable.
Concrete
Sysdyne Technologies, a Connecticut startup, received funding (undisclosed). They have developed an operations platform for the ready mix concrete industry offering services such as quoting with real time data, centralized dispatching, batching processing, delivery management and seamless invoicing. More here.
[View open jobs - 1 role in HR, 1 role in Sales]
Notes:
Sysdyne Technologies has a solution which provides GPS tracking of trucks with the batch information provided.
This would be valuable for site engineers
(for some reason on every site I’ve been on the concrete deliveries are always late).
Giatec, a Canadian startup, received $17.5m in funding. They are developing an AI and IoT sensor enabled platform for the concrete industry. Their sensors provide real time, wireless and long range concrete temperature and strength measurements and their platform uses AI to optimize concrete mixes. More here.
[View open jobs - 1 role in Finance, 1 role in Software]
Energetic renovations
Purpose Green, a Berlin startup, raised $15m in Seed funding. They are developing an end to end solution for energetic retrofits from analyzing building data and creating a Carbon Risk Real Estate Monitor to project managing the implementation of the retrofit managing contractors, procurement and construction supervision. More here.
[View open jobs - 1 role in Finance, 5 roles in Marketing, 4 roles in HR, 2 in Product]
Notes:
According to the European Commission, real estate is responsible for 35% of emissions and 40% of energy consumption.
By 2050, as much as 90% of Germany's entire stock must be renovated.
To achieve this goal, the renovation rate, currently at about one percent, must double to two percent.
My notes:
I’ve started to notice that more startups appear to be vertically integrated construction companies.
By this I mean they handle all activities from customer acquisition, design planning, procurement, project management and installation / delivery.
This model is emerging for startups in climate verticals such as energetic renovation or residential renewable energy installation e.g heat pumps or solar panels.
I suspect it is driven by increasing regulatory complexity and labor force shortages.
Building Materials
Paebbl, a Nordic / Dutch startup, raised €22.8m in Series A funding from investors including Holcim. They have developed a way to permanently store CO2 in building materials such as concrete structures. More here.
[View open jobs - 3 roles in Software, 1 roles in Operations, 1 role in Finance, 3 roles in Other]
Modular Construction
Gropyus, an Austrian startup, raised €100m in funding. They design and build sustainable, modular apartment buildings that are affordable and customizable using robots in their factory to reduce construction time and labor costs. More here.
[View open jobs - 2 roles in Project Management, 3 roles in Architecture, 4 roles in Structural Engineering, 1 role in Other]
Sales
Building Radar, a German startup, raised $7.2m in funding. They are developing a platform which automates workflows in construction industry sales including helping sales professionals identify and qualify the most promising leads (it automates research for new projects with daily notifications) and provide insights and personalized outreach strategies. More here.
[View open jobs - 1 role in Sales]
Proposals
Vultron, a San Francisco startup, raised $4.85m in Seed funding. They have developed an AI powered proposal development solution for the public sector used by government contractors to help them submit high quality proposals to secure more business. More here.
[View open jobs - 1 role in Support, 2 roles in Sales, 4 roles in Software]
Notes:
Construction is listed as an industry they serve.
Material Testing
Wavelogix, an Indiana startup, received $1m in grant funding. They have developed an IoT sensing and data analytics platform including concrete strength sensors which provide real time measurements of in place concrete strength which allows for data driven decision making on scheduling without requiring lab testing. More here.
Notes:
When concrete is poured on site we usually collect small test cylinders from the same batch and cure them in a lab to calculate the strength.
At regular intervals (1, 7, 14 and 28 days after pouring) the lab completes destructive testing to confirm the strength of the concrete placed.
This allows us to understand the strength development of the in-situ (on site) concrete. While accurate, there can be discrepancies between the lab and in-situ strength development due to differences in curing conditions.
For critical projects where concrete strength is crucial for proceeding to the next stage (e.g. opening a road to traffic), measuring the in-situ concrete strength directly can provide more immediate and accurate data than relying solely on lab-cured cylinder tests.
Wastewater
Kando, an Israeli startup, raised $10m in funding. They have developed a wastewater intelligence solution which is able to target anomalies and empower teams to manage issues such as stormwater overflow in real time. More here.
Modular Construction
Bao Living, a Belgian startup, raised €1.5m in Seed funding. They develop modular, sustainable building solutions with a patented modular furniture system that integrates all the necessary elements for kitchen, bathroom and bedrooms, including electricity, water supply, ventilation and heating which can be dismantled and reused after use. More here.
Nuclear
Blue Energy, a Washington DC startup, raised $45m in Series A funding. They build modular nuclear power plants that can be centrally manufactured in existing shipyards using a modular plant design that is reactor agnostic and reduces construction time by 80%. More here.
[View open jobs - 1 role in AEC Modelling, 1 role in Project Management, 1 role in Structural Engineering]
Notes:
According to Blue Energy, the nuclear reactor only accounts for 7% of the cost.
The other 93% is broken down as follows:
43% construction and development overhead
36% interest during construction
14% additional materials and labor
Grid Infrastructure
Supernode, a Dublin startup, raised €8m in funding. They are developing a superconducting cable which is claimed to be up to five times more powerful than conventional cables at much lower voltage levels. More here.
Notes:
Conventional cable technology is capacity constrained and will not be able to transmit the required levels of renewable power needed in the system.
This will delay the construction of new renewable infrastructure.
Additionally, building more grid infrastructure is challenging with permitting for new lines taking up to 4 years (new legislation is aiming to reduce this to 2 years).
Therefore it is important to identify and adopt new technology which can maximize the capacity of existing infrastructure.
Data Centers
Scala Data Centres, a Brazilian startup, raised $550m in funding. They have developed a sustainable data center platform for hyperscalers including developing a proprietary design and construction methodology using prefabricated and modular components for a class of data centers. More here.
Other
Third Dimension AI, a San Francisco startup, raised $6.9m in Seed funding. They use generative AI to create detailed and immersive 3D environments allowing engineers to build fantastical or entirely accurate representations of the real world in high-fidelity. More here.
Notes:
This solution has found traction in the gaming, geospatial and military industries and could have applications for construction.
It could be used for city level digital twins and to create renderings for future construction (e.g NEOM), accelerating workflows of developers from months to days.
Policy and Regulatory Changes
FRA opens $1B intercity passenger rail grant funding round
The Federal Railroad Administration is making more than $1 billion available to states, counties, cities and other public entities to expand or upgrade intercity passenger rail outside the Northeast Corridor.
EPA requires lead pipes to be replaced nationwide within 10 years
Utilities are required to provide an initial inventory of all lead pipes and identify service lines with unknown material.
The lead pipes are to be replaced within 10 years, at a cost of tens of billions.
The Biden administration is providing an additional $2.6 billion in funding for pipe replacement.
India’s Supreme Court Enables ITC Claims on Commercial Building Construction (India)
The Supreme Court of India stated that if constructing a building is necessary for providing services like leasing or renting, it may qualify as ‘plant and machinery.’
This has allowed companies in the country to claim input tax credits (ITC) on construction costs for commercial buildings intended for rental purposes.
A provision previously restricted ITC claims on materials used in immovable property construction, except for plant and machinery.
Skills gap looms for energy efficiency jobs tied to net-zero emission goals: IEA
The International Energy Agency predicts that the push for building energy efficiency will drive significant job growth.
Retrofitting buildings alone is estimated to create an additional 1.3 million jobs by 2030 based on a scenario where net-zero emissions are achieved by 2050.
Training electricians, building designers, glaziers, insulation workers, HVAC and refrigeration mechanics and installers is vital to meeting building energy demand across climates.
The U.S. faces particular challenges, with 83% of energy efficiency employers reporting hiring difficulties in 2023.
San Francisco unveils guidelines to streamline office-to-residential conversions
The San Francisco Department of Building Inspection announced a series of new building code guidelines.
These clarify adaptive reuse code provisions and exceptions for converting office-to-residential buildings.
The effort is one component of the Mayor's plan to convert at least 5 million square feet of office space to approximately 5,000 units of housing by 2030.
Next steps for enabling more offshore renewable energy generation (New Zealand)
The New Zealand government has a plan to double the supply of affordable, clean energy and enable it to become a low emissions economy.
The government is introducing legislation to increase offshore renewable energy involving two dedicated permits:
A feasibility permit – to provide greater investment certainty through providing an exclusive right to apply for a commercial permit, and the ability to obtain environmental consents in a specified area.
A commercial permit – to enable the building and operating of offshore renewable energy infrastructure.
Permitting council invests $15M in ‘surge capacity’ for agencies to manage infrastructure boom
To help agencies deal with the rise in environmental reviews and permitting work due to the Bipartisan Infrastructure Law and the Inflation Reduction Act, the Federal Permitting Council is investing $15 million in a new contracting tool.
The council has already invested $40 million in federal IT solutions to modernize agencies’ outdated permitting systems.
DOE commits $16.7M for 25 hydropower, marine energy innovation projects
The U.S. Department of Energy (DOE) announced nearly $16.7 million for 25 small-business-led hydropower and marine energy projects.
What to expect from the highway Humsafar policy (India)
The policy is aiming to build 950 new roadside stops on national highways to improve and update the services for road users.
It will offer incentives to new and existing such service providers, monitor their standards and locate them on an app.
National Infrastructure Projects & Priorities
US
U.S. Ramps Up Hunt for Uranium to End Reliance on Russia
Nuclear power is coming back into vogue in the United States.
As a result uranium mines are ramping up across the West.
This is spurred by rising demand for electricity and a federal law that will block American power plants from buying Russian uranium by 2028.
Last year, the United States produced just 50,000 pounds of yellowcake.
By 2028, consultants expect U.S. production to rise to ~six million pounds of yellowcake.
Notes:
This can result in increased construction spending e.g mining in Australia is a significant source of work for construction companies.
India
Indian state gov't approves large scale sustainable data center project
The Green Integrated Data Centre Parks project plans to build several data center parks in and around Mumbai, totalling 1.5GW of IT capacity.
The state is planning to attract investments of upwards of $20 billion for the project.
The Indian data center market is expected to reach $13.96 billion by 2029, over double its 2023 value of $6.9 billion.
China
Chinese outbound investment surges to record on clean energy ‘tsunami’
Investment from China into other countries rose 12.5 per cent in renminbi terms to $112.2bn in the first eight months of 2024 compared to 2023.
Analysts suggest companies are looking to set up manufacturing operations abroad in the face of US and EU tariffs.
This is driving new industrial hubs in countries including Thailand, Indonesia, Brazil, Hungary and Morocco.
Estonia
Estonia begins construction on Europe’s largest battery park
The project is designed to help Estonia, Latvia and Lithuania synchronize their electricity grids with Europe by 2025.
This removes their dependency on the Russian grid.
Sweden
Sweden To Start Building New Nuclear Reactor By 2026
The government said in November 2023 it wanted to increase nuclear power production equivalent to two nuclear reactors by 2035, with a "massive expansion" to follow by 2045.
Sweden currently has six reactors at three nuclear power plants, which generate ~30 percent of the electricity used in the country.
Columbia
Colombia Unveils $40 Billion Climate Transition Plan to Replace Fossil Fuel Revenue
Part of the funding will be directed towards renewable energy projects and green infrastructure.
Malaysia
Malaysia is emerging as a data center powerhouse amid booming demand from AI
The city of Johor Bahru, located on the border with Singapore, is the fastest growing data center market in Southeast Asia.
It has 1.6 gigawatts of total data center supply, including projects under construction, committed to or in the early stages of planning.
If all planned capacity comes online across Asia, Malaysia will only be surpassed by the larger countries of Japan and India.
Investment fund
Wind Capital, a Parisian Venture fund received €30m for their second fund following their first closing at €90m. They aim to invest in startups addressing critical areas vital to human well-being and environmental health which includes solutions relating to construction. More here.
News
AI Unlocks Billions of Dollars for this One Group in Construction (Primary Venture Partners)
Over 60% of change orders are because of design errors and omissions.
Change orders can cause 10-15% cost overruns in construction.
The goal should be to use automation to get soft costs as close to zero as possible (soft costs refer to service work like design, architecture, structural engineering, legal, and financing).
Cost of Producing Green Hydrogen Makes it Prohibitive, Says Study
A Harvard University study cast doubt on the viability of hydrogen as a fuel in the U.S.
Researchers say the costs of producing, moving and storing the gas are higher than they are for using fossil fuels and then removing carbon from the atmosphere afterwards.
The US has been moving ahead with blue hydrogen.
This involves production of hydrogen using fossil fuels as an energy source, with the carbon emissions then being captured.
Notes:
This could have an impact on the construction of hydrogen infrastructure.
With greater use of drone applications in construction, UTA launches drone flying course
The University of Texas is offering a drone course ‘Drones and Advanced Construction Technology,’ to its upper-division civil and architectural engineering students.
It’s the only drone course at a college in North Texas that is certified with the Federal Aviation Administration
Helene deals billions in damage to infrastructure
Roads, bridges, electrical grids and water systems need to be rebuilt following the deadly storm.
Infrastructure damage was estimated at over $30b.
If I missed anything this week, please reply and let me know! I’ll make sure to include it next week.
Disclaimer: The purpose of the newsletter is knowledge sharing and entertainment. Every week, we provide a non-biased recap of the construction tech market by utilizing public information and investment activity provided by investors, tech companies, and third-party organizations. We do not endorse companies for investment purposes. The information provided should not be used to make any investments or financial decisions. Investing in technology and innovation-based companies is risky. Please consult an investment specialist before investing.